In a stunning legal development, a Malta-based advisory firm controlled by embattled insurance tycoon Greg Lindberg has been found liable for violating the Investment Advisers Act of 1940, facilitating the misappropriation of $57 million in client funds. The ruling, issued Monday by U.S. District Judge Catherine C. Eagles in North Carolina, cements yet another blow to Lindberg’s already embattled empire.
A Trail of Fraud: SEC Exposes Deceptive Transactions
The U.S. Securities and Exchange Commission’s case, filed in August 2022, revealed how Standard Advisory Services Ltd. (SASL), helmed by Lindberg and executive Christopher Herwig, orchestrated complex financial schemes to funnel millions away from policyholders. The court noted that both Lindberg and Herwig had already admitted to fraudulent practices in separate consent judgments, reinforcing the firm’s liability.
“It is undisputed that Lindberg and Herwig were high-ranking agents of SASL,” Judge Eagles ruled. “A limited liability company like SASL can only act through its officers and agents, and, consequently, the acts of its officers and agents constitute the acts of SASL under the basic principles of agency.”
The Schemes That Shook an Industry
The SEC detailed two distinct fraudulent schemes. In the first, Lindberg—after acquiring full control of four North Carolina insurers—directed them to engage in a convoluted buy-and-sell cycle of their investments at inflated prices. This maneuver allowed Lindberg and Herwig to extract fraudulent profits from policyholder funds.
